PA Law Legal Video Guides · Personal guarantees · Company directors · South Australia
Does resigning as a director cancel your personal guarantee? Not automatically. A personal guarantee creates obligations you accepted personally, separate from the company’s obligations. Check the document you signed and whether a formal release is needed. Removing your name as a director from ASIC does not, by itself, release every contractual obligation you accepted.
Video by PA Law Pty Ltd · Approximately 1 minute 7 seconds · Published 26 September 2026 (South Australian time). This video uses AI-assisted presentation.
Why can a personal guarantee continue after resignation?
Your role as a director and your obligations under a guarantee are separate matters. A landlord, bank, finance provider or supplier may have required your personal guarantee when dealing with the company. Leaving the director’s role does not necessarily end that agreement.
The effect of resignation depends on the actual guarantee, any later agreements and applicable law. The Legal Services Commission of South Australia’s guidance on resignation of a director explains that a director’s guarantee can remain enforceable after the guarantor stops being a director.
Which personal guarantees should you check?
Start with a list of the company’s key contracts and credit arrangements. Look for guarantees you signed in connection with:
- A commercial lease or other premises arrangement.
- A bank loan, overdraft or finance facility.
- Equipment or other business finance.
- A supplier’s credit application or trading account.
Obtain complete copies of the signed documents, including schedules, terms incorporated by reference and later variations. The guarantee may be part of another document rather than a separate form headed “personal guarantee”.
Five checks before leaving a company
- Identify each guarantee: record who you gave it to and the company obligation it relates to.
- Read the scope: ask what amounts or obligations it covers, whether limits apply and whether any indemnity or security is included.
- Check how it ends: have any release, termination or notice provisions reviewed. Do not assume a resignation letter is sufficient.
- Discuss a formal release: where needed, negotiate with the party entitled to rely on the guarantee and obtain appropriate written documentation.
- Keep the records: retain the signed guarantee, correspondence, any release and evidence that any conditions of release have been satisfied.
These are questions to take to your solicitor, not a substitute for reviewing your documents. A proposed company exit, share sale or change of management is a useful time to address personal guarantees before the arrangements are finalised.
Does updating ASIC release the guarantee?
Do not treat an ASIC record showing that you have ceased as a director as evidence that a creditor has released you. The company record and the guarantee serve different purposes. Check the contractual position separately and obtain advice on the steps required for your particular guarantee.
What if another director says they will take responsibility?
Do not assume that an internal understanding with another director releases you from obligations owed to a landlord, lender or supplier. Ask your solicitor whether the relevant creditor must agree and whether the proposed documents achieve the release you intend. Check what happens to existing liabilities as well as any future obligations.
What if you have already resigned or received a demand?
Gather the guarantee, underlying contract, variations, resignation documents and any correspondence about release. If you have received a demand, keep it and note any response date. Seek advice promptly rather than assuming the demand cannot apply because you have left the company.
Personal guarantee advice in South Australia
PA Law assists clients in Evanston South, Gawler, Adelaide and across South Australia with commercial contracts and business advice. Whether you are joining a company, leaving one or being asked to sign a guarantee, understand the personal obligations before committing.
Contact PA Law or call 0431 614 696 to discuss your documents. If a dispute has arisen, see our civil litigation services.
Related guide: Before You Sign an Offer to Lease in South Australia.
Video transcript
Based on the video’s automatic captions, lightly edited for punctuation and readability.
You’ve resigned as a director of a company. So, does that mean you’re automatically released from the personal guarantees you signed while you were a director? Not necessarily. And this can come as a very unpleasant surprise.
When your company enters into a lease, obtains finance, or opens an account with a supplier, you may be asked to sign a personal guarantee. That guarantee is separate from the company’s obligation. So, simply resigning as a director doesn’t necessarily make the guarantee disappear. You need to look at the actual document you signed and determine what obligations you personally agreed to.
If you’re leaving a company, one of the things you should be checking is: what personal guarantees have I given? That could include guarantees to a landlord, bank, finance provider, or supplier. Then consider whether you need to negotiate a formal release from those guarantees. And importantly, don’t just assume that removing your name from ASIC means you’ve been released from everything you signed while you were a director.
If you’re joining a company, leaving a company, or being asked to sign a personal guarantee, understand exactly what you’re agreeing to before you sign. Sometimes leaving the company is only one part of leaving the liability behind.
General information only: This guide is not legal advice. Your rights and obligations depend on your documents, circumstances and applicable law. Obtain advice about your particular situation.